05 June 2014
agriculture incom is a state subject so central govt cannot levy income tax on it. but through an indirect method (partial integration ) govt is levying tax on it.
is centrl govt is authorised to levy tax on agricultural income in an indirect way.
your query is correct that there is a partial tax impact due to inclusion of agriculture income in total income to arrive at taxable income and then providing rebate on tax on agriculture income. but the same has been ratified by the Parliament and is therefore legal provision.
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